Alex Salmond’s case for a surviving Social Union undermined

Polling on Scottish independence shows opinion staying stuck broadly against it in familiar proportions, despite the rising volume of campaigning. But as this will be is an unprecedented once for all exercise with plenty of “don’t knows”, or “not yet decided” in the frame, there are no grounds for complacency. The SNP’s White Paper on independence is expected next month on which they will be judged. Meanwhile the classic case for the Union is made by Jim Gallagher, a principal architect of devolution. Here Gallagher disputes Alex Salmond’s claim that social solidarity with the remaining Union would survive separation. One to cut out and keep.

A fiscal union means taxes are paid by the people and places that can afford them. The money goes into a common pot and pays for pensions, benefits and public services for people who need them, wherever they are. Need, not nationality, decides where spending goes. Sharing goes alongside belonging.

To understand what this says about a union is, look at the big contrast between the UK and the European Union. The UK has deep economic integration; the EU single market is incomplete. UK tax and spending is integrated, so pensions are the same and public services comparable wherever you go; not so between the north and south of the EU. EU bail-outs and structural funds are grudging and limited, but taxpayers in rich parts of Britain take for granted that they support benefits in poorer regions. This is because the eurozone struggles to become an effective political union. I have argued in two recent articles in these pages that economic and social union in Britain is a product of a long-standing political union.

Political union is, of course, precisely what Scottish independence would end, and much of the argument in the referendum campaign has been about the nationalist assertion that economic and social union could survive such a split. The lesson from Europe today is that it would not.

This Union will develop more. So long as we preserve its key features of economic integration and social solidarity, there is plenty of scope for change.

Raising devolved taxes gives autonomy – to make their own decisions – and accountability to their electorates. The right mixture depends on the circumstances of each nation. In Scotland’s case, it should be possible to move roughly as far as a 50/50 split. The technicalities of tax devolution put limits on this, but the important principle is that excessive fiscal autonomy is inconsistent with effective social solidarity. Northern Ireland and Wales have weaker economies and tax bases, and more social solidarity, so their scope for devolved taxes is less.